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How wide is your spread,i.e percent of spot?? Your protective wing is "a little further out",but you still have a max loss of 5,000 while taking in 20 bucks?? makes no sense

Im using your prices.. The 11 calls are trading at ($0.10),not ($0.02)... Lets just say the spreads trade for even money... I think you will find most traders that haven't gone the way of the dinosaur would choose the second option...Limited risk(max loss if stock is unchanged) and unlimited...

You have a decent understanding,certainly enough to make yourself dangerous:) Following up on your example,if I forced you to trade the 9/11 ratio vs backspread,which would you choose?? You can either be Long 1 9 call and short 10 of the 11 strike for a .02 debit or Short 1 9 call and long...

What kind of returns can you generate by selling puts at far less than 1% of spot? Define thriving

You really believe selling garbage options is an efficient use of capital?? Show us the numbers.. What kind of returns can you put up?? Trade direction,trade vol,but for the love of money don't sell garbage options...There is no upside..

And how much money does your buddy make selling garbage options?? If you are in the business to make .05-.10,then knock yourself out.. And I mean that literally

First and foremost,I guaranty you will be a net loser....Those .05 options will go to 5 bucks sooner or later.. Secondly,whats your return on selling that 5 delta put?? Im not 100% positive on how much cash you have to put up,but Im guessing you would be lucky to annualise 5% return....Im not...

Its an awful awful idea on every levels. If you feel compelled to sell garbage,do a split strike fly or a 1 x2..At least you can make real money if you are lucky.. Here's the real issue,and Im quoting William Eckhardt. "The problem in a nutshell is that human nature does not operate to...

Let me guess,you also believe Global warming is a complete fabrication of the truth... Read the China Study,and get your cholesterol levels checked:)

To the OP, Run a simulation with your chosen strategy. Now run MAE/MFE reports and look at the MAE trades distributions,looking at scatter plots illustrating profitability at various MAE intervals.Look at the Profit % for given MAE intervals.. If you are a trader and not a dollar cost average...

Quantshare costs $250 and you can download free data(or pay for Norgate) and do all you ask..

Warren Buffet Accounting by Stig Broderson is a good start.

Horizontal trendlines..quite possibly Sloping??? Best of luck

Somehow,Warren Buffet and Desperate/Jealous dont belong in the same sentence.... And on a related note.Brad Gerstener returned 50% over the last 3 years while trading billions.. Peter Kolchinsky returned 41%....

FWIW,he made the statement in 1999..

Im not a Warren nut hugger,but he made that claim,and he wasnt referring to private equity deals.He was talking small cap..

Warren has said he guaranties he could make 50% per annum if he traded far smaller size. I believe he means what he says regarding diversication,at least intheory

Unless you were Peter Lynch

You are far from alone with this decision.Ild reccomend reading the book Monentum Master's and they address this very question.

Keep it simple..Run a simulation,look at the underwater equity graph(vs open) vs MFE. Use a time stop for the first go round.Its a good exercise and should answer the question,or at least let you know what you are up against,and what your chances of success are should you choose to average...